Haig v. Bamford et al.

Haig v. Bamford et al.

Where an accountant prepares and certifies financial statements for reward knowing they will be supplied to a limited and identifiable class for the purpose of guiding investment decisions, the accountant owes those members a duty of care even if the accountant does not know the exact identity of the eventual...

Source-derived case information.

Citation
[1977] 1 SCR 466
Parties
Plaintiff Appellant: Gordon T. Haig; Defendant Respondent: Ralph L. Bamford; Defendant Respondent: Nairn Hagan; Defendant Respondent: Alfred R. Wickens; Defendant Respondent: John Gibson; Defendant (discontinued): Scholler Furniture & Fixtures Ltd.; Defendant (discontinued): Siegfried Scholler
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
1 April 1976
Procedural Posture
Tort Professional Negligence (negligent Misrepresentation) / Appeal to Supreme Court of Canada From Court of Appeal for Saskatchewan; Final Determination on Duty and Damages
Outcome
Appeal allowed; judgment of Court of Appeal set aside; trial judgment reinstated subject to deduction
Legal Topics
Duty of Care, Proximity and Foreseeability, Assumption of Responsibility, Reliance, Auditor Liability, Economic Loss
Source Language
english
Torts Professional Negligence Negligent Misrepresentation Corporate/investment Transactions Duty of Care Proximity and Foreseeability Assumption of Responsibility Reliance +2 more

Source-derived case record

Summary, issues, holding and outcome

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Parties

Gordon T. Haig

Plaintiff Appellant

Ralph L. Bamford

Defendant Respondent

Nairn Hagan

Defendant Respondent

Alfred R. Wickens

Defendant Respondent

John Gibson

Defendant Respondent

Scholler Furniture & Fixtures Ltd.

Defendant (discontinued)

Siegfried Scholler

Defendant (discontinued)

Procedural Posture

Tort Professional Negligence (negligent Misrepresentation) / Appeal to Supreme Court of Canada From Court of Appeal for Saskatchewan; Final Determination on Duty and Damages

Legal Issues

  1. 1 Whether accountants owe a duty of care to a potential investor who is unnamed when the accountants know the statements will be supplied to a limited class for the purpose of inducing investment
  2. 2 Whether the appellant justifiably relied on the financial statement and whether recovery for subsequent advances is recoverable

Ratio Decidendi

Where an accountant prepares and certifies financial statements for reward knowing they will be supplied to a limited and identifiable class for the purpose of guiding investment decisions, the accountant owes those members a duty of care even if the accountant does not know the exact identity of the eventual investor; negligent certification exposing the investor to foreseeable economic loss is actionable, though subsequent voluntary advances made after actual knowledge of the true state are not recoverable.

Court Disposition

Appeal allowed; judgment of Court of Appeal set aside; trial judgment reinstated subject to deduction

Orders

  • Appeal allowed
  • Judgment of the Court of Appeal for Saskatchewan set aside